Initialized Capital, an early-stage venture capital firm started by former Y Combinator partners Alexis Ohanian and Garry Tan, has raised $115 million for its third fund. The focus is on investing in companies that are just getting started by putting in between $500,000 and $1 million — just enough to help them get some traction.

Reports this summer suggested that the firm was targeting $100 million. Previously, it had raised $7 million for its first fund and $39.15 million for its second. How much is currently under management hasn’t been disclosed.

Founded in 2011, the firm seeks out what it calls “high-quality founders” to help shape solutions or focus on markets that need to be addressed:

We believe great companies emerge from many industries and disciplines, and from anywhere in the world. We are best at funding small teams just starting out, when they have zero to 10 employees. You should have a great team pointed at a great idea, but we’re not afraid to invest even if you only have an early demo.

Tan has stated that his firm is spending more time with what he calls “file cabinet” industries, where if you go into a dominant player’s office, you’ll see “lots of file cabinets or fax machines.” This suggests startups working on productivity, team communication, and other software-based solutions to get things done.

Previous investments include Soylent, Vicarious, Kimono Labs, LogDNA, Eero, Weave, Secret, and Cruise Automation. It should be noted that some of the capital has been given to former participants of the Y Combinator startup program, which shouldn’t be surprising, as it can follow up on opportunities to help entrepreneurs after Demo Day.

In a Hacker News Q&A session, Tan remarked that 1 out of 3 startups from the firm’s last fund were not associated with Y Combinator, instead coming from other sources. What’s more, he said that approximately two-thirds of the firm’s portfolio is based in the San Francisco Bay Area. “[San Francisco and Silicon Valley] is still the most concentrated place for startups, so when you want to grow fast, it’s still probably the most concentrated place for talent and capital,” he wrote. “You can certainly start a company anywhere (and people are, and that’s great!), but when you want to grow fast, many people still move here, now increasingly at the Series A.”

As for why Initialized Capital puts in between $500,000 and $1 million, Tan stated: “Most seed rounds we see come together are between $1 million and $3 million these days, so that amount of capital lets us get our percentage ownership (which is necessary for portfolio construction) while also letting a good round happen with other good seed investors. Most folks want at least 18 months to 24 months of runway to get to a solid Series A or profitability, so a lot of these numbers work backwards from that.”

Tan runs the show as the managing partner, but he works alongside other partners, including Ohanian; former Tamares Group partner, Alina Libova; Pinterest’s Austin Chang, who is a part-time partner with Initialized Capital; and Kim-Mai Cutler, who serves as a marketing-focused operating partner with the firm and as a columnist for TechCrunch. Another Y Combinator partner, Harj Taggar, participated in the firm’s first fund but has since shifted his focus to his startup, Triplebyte.

Updated as of 10:29 a.m. Pacific on Tuesday: Amended post to state that partner Harj Taggar was only a partner in the first fund and is now focused on running his company Triplebyte.

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